The annual sales volume of Singapore’s B2C e-commerce market averages around $4.11 billion, with a growth rate of 35% yearly. With a tech-savvy population and strong IT infrastructure, e-commerce is becoming a preferred way of shopping. Here is a step-by-step guide to setting up an online store.

Decide what to sell

This is the first thing that you need to determine, and it will ultimately affect the rest of your decisions. Factors to consider include:

1. Complexity
   If you are setting up an e-commerce store for the first time, it is better to go for a simple product that is easy to source and produce. For instance, the shipping weight should be light, and the packaging simple. Avoid complicated solutions the first time round as you want to test out your shop.
2. Scarcity
   It is better to sell a niche product than one that is already in wide supply. One way to check market capacity is to look at existing Amazon stores that are selling the product. With fewer testimonials, there will be room for another seller.
3. Profitability
   Essentially, is there any money left after a sale once all other business expenses have been deducted? This is your profit and you should be aiming for 10 to 20%.

Choose your business model

There are a few ways to run an e-commerce business.

1. Dropshipping
   The simplest is dropshipping, where you serve only as a storefront. You find a suitable product, sell through your e-commerce store and pass the order onto a third party supplier. You never hold the product. This business model requires mostly marketing and customer communication. However, it does not offer high profits and is very competitive, since buyers will be comparing prices from different stores.
2. White labelling
   Another business model is white labelling. This involves creating a strong brand, and then sourcing no-name products to sell under this brand. You can offer a wide range of products all made by different manufacturers, but under your brand. While this model offers reduced production costs you have less control when it comes to quality and supply chain costs.
3. Traditional
   Finally, the most complex is a traditional model. This includes supervision of the whole cycle from production to end purchase. It requires time, effort, and a higher level of risk. Similar to white labelling you will manage sales, inventory and storage as well production and cost optimisation. While the risk is higher with this model but you have full control and if successful could offer a more satisfying experience.  

Select an e-commerce platform

Choosing a well-known e-commerce platform will mean that you can benefit from a massive user base, although the environment will be competitive as well. Here are some great platforms to work with:

1. Lazada
   Lazada is a locally developed marketplace in Singapore offering a wide range of goods and is popular destination for local shoppers.
2. Shopee
   Also developed in Singapore, Shopee is now widely used throughout Asia and is known for ease of use.
3. Qoo10
   Qoo10 is a very popular platform, but costly with a 7-10% fee for every transaction made.

Or build your own online store

Shopify

Shopify allows you to build your shop super easily and intuitively. It provides a wide range of possibilities for creating a unique brand design and feel. It is a more expensive option and fees could go up to as high as $299/month, depending on your add-ons.

Open a business bank account and choose a payment method

Remember to make it easier for customers to make payments! Here are some popular payment gateways:

1. Paypal
   Paypal integrates well with the majority of e-commerce platforms, with two preferred options: PayPal Express and PayPal Standard. Express is a faster way to pay. Purchases can be processed directly on a website with minimal fuss from the consumer’s point of view. The fee is flexible and starts at 3.9% of the sales amount, plus another $0.50 fixed transaction fee. The fee percentage goes down as sales volume increases, making it economical to sell more.
2. Stripe
   Stripe is more affordable than Paypal, with a flat 3.4% fee on sales amount, and a $0.50 fixed transaction fee. Using Stripe will be easier for Shopify users, as it is already integrated.
3. SmoovPay
   This is a solution with competitive pricing, developed in Singapore. SmoovPay charges 2.9% on the total sales amount and an additional $0.25 fixed transaction fee. It is fairly simple to integrate, taking around 15 minutes to complete the setup. However, redirection to another page is needed for the payment. This may cause some customers to abandon payment halfway.

Customer service and delivery

When it comes to logistics, choose a communication platform and delivery partner that does everything for you in a hassle-free way. Timely response is important to any SMB and messaging apps like WhatsApp and Messenger offer immediate communication channels. These can be accessed on mobile devices so customer queries can be answered by staff anytime and anywhere.

Looking at actual delivery, Ninja Van is a strong option as the leading courier company in Singapore and Southeast Asia. Its automated technology, responsive customer support, and delivery services for every budget, work for an e-commerce business of any size. Other options, who offer a similar tech service include, Pickupp and GrabExpress.